MCA notifies certain provisions of the Companies (Amendment) Act, 2019

The President of the India has given assent to the Companies (Amendment) Bill, 2019 on 31 July, 2019. Pursuant to the Companies (Amendment) Act, 2019, (Amendment Act) the Companies (Amendment) Second Ordinance, 2019 (Ordinance) is repealed. The provisions of the ordinance which has been made part of the Amendment Act are made effective from 2 November, 2018.  The other provisions of the Companies Act shall come into force as and when notified by Central Government. Any action done or taken under the ordinance shall be deemed to be taken under this Act.    

The following key provisions of the Amendment Act have been made effective from 2 November, 2018:

1.      Shifting of jurisdiction of 16 types of corporate offences to in-house adjudication mechanism. Among these 16 offences, crucial one’s are

a.       MGT-7 filed u/s 92 of the Act

b.      MGT-14 filed u/s 117 of the Act

c.       AOC-4 filed u/s 137 of the Act

2.     Compounding of offences u/s 441 is now exclusive power under NCLT and Special Court is eliminated from it.

3.     Reduced the burden of the NCLT by:

a.      Enlarging the scope of Regional Director by increasing the limit from Rs. 5 lakhs to Rs. 25 Lakh u/s 441 of the Act;

b.   Now, the Central Government has the power to approve (Powers delegated to Regional director)

i.          the alteration in the financial year of a company u/s 2(41) of the Act

ii.        Conversion of public companies into private companies’ u/s 14 of the Act

4.     A declaration is to be filed with registrar within the given time before commencement of business or exercising the borrowing powers declaring that

a.       Every subscriber to Memorandum has paid the value of shares as agreed

b.      Verification of registered office u/s 12(2)

In case of default, the company will be liable to strike off u/s 248 of the Act.

5.   Increased accountability with respect to filing documents related to creation, modification and satisfaction of charges

6.    Holding of directorships beyond permissible limits (20) would lead disqualification of such directors. Consequently, vacation of office from all the Companies